I had to borrow money to take this screen shot

https://preview.redd.it/p311qukalspd1.jpg?width=1662&format=pjpg&auto=webp&s=324e413d546bf2642bb58b059ae10b44154f46ec

Labor markets are still strong, just look at the initial claims this morning. Labor market revisions have been pretty bad but who cares about that right? Truly overall conditions are not at all recessionary right now. Yes yes we have a bunch of warning indicators etc firing off, but most businesses are still seeing growth and excellent profits. There was reason to cut 0.25, but 0.5 is more of a panic move no matter how you spin it. So what the heck is the fed so worried about? Why jam the gas here? AI.

You still here? Okay good lol, thought I lost you at AI. But seriously, that’s why they cut 0.5. AI is not agi, but it is still being used by a ton of office type jobs and businesses to increase efficiency, cut down on menial workloads and generally to just increase productivity. For arguments sake let’s say on average it has increased productivity 15% across the board for businesses that can utilize ai in some fashion. Sick, that’s awesome. Well… not for long. When, not if but when the US next enters a mild recession (which seems pretty likely over the next year or so), what will happen? Will all of these businesses that have just been gifted a juicy increase in productivity just shrug their shoulders and continue to hire people and grow during a recession? Or will they make the easiest call ever and layoff 15% of their staff right out of the gate, because they truly do not need them. The business can continue to produce the same amount of work / productivity with 15% less staff, and that is without pushing people to do more, that’s just trimming the fat. And that’s also assuming workloads stay at current levels and do not decrease during a recession. If they decrease, then more layoffs come.

So, if a lot of businesses are in that boat, a mild recession will = a disproportionately large layoff cycle. It’s a no brainer, every mba in the room is going to be on board with this. And you know what leads a mild recession deeper into a major recession? Large layoffs…. So, bit of an issue here hey?

But wait! There are other jobs! People will just go do those. Or maybe drive an Uber? Tons of driver jobs out there. For now. Driverless vehicle tests are succeeding and creeping into the delivery sector more and more. Those jobs will shrink, that sector will face layoffs too. But… maybe people can get in to construction and home building etc! Tons of work there! Yes that’s true, but as a recession takes hold, and more people lose their jobs, you know what they don’t do? Buy a new house. So, that sector maybe stays stable ish overall, but there will be no job boom there either. Okay but what about ai? I can use ai to make stuff and run my own little super business! Sure some people will find success with that angle, but it’s going to be a fraction of the total numbers that get laid off. The market will be flooded by people using ai to produce some stupid app or service that is likely generic and sub par to what large businesses can offer. Remember, they have ai too.

Okay… so people ride out the recession, and then companies go back into hiring mode as the recession naturally fades, and we all get back to making the big bucks right?? NO. AI efficiencies are NOT going to decrease. 5 years from now, companies will be able to do more with less. The jobs that get cut in the next recession will not be coming back, period. We are heading into structurally high unemployment. And this, THIS IS WHY THEY CUT 0.5. There is no universal basic income system setup that can handle the permanently high levels of unemployment that are on the horizon. The fed knows this, the literally said they are now focused on the labor market portion of their dual mandate. They have to keep the party going no matter the cost, to buy themselves time to figure out a way to handle what comes next. This is end game, there is a leak in the boat, we are going to sink, so we need to jam the gas and tell everyone to look out the back at the pretty pretty ocean while preparing to hit the shore hard. This is why employment numbers keep getting revised down, they are intentionally fudging the initial data release to keep up the illusion of a strong economy. They have to.

Will the market crash tomorrow? I mean anything is possible but I doubt it. Big money knows that the fed is pushing the narrative that everything is awesome, and big rate cuts are just because we are all so cool and we deserve it. They know the fed will pull out all of the stops to keep the party going. Big money will bail right before we hit the shore, if they go too soon, they risk tipping off the rest of us that something is wrong. And once we all think something is wrong, we pull back on spending, and that accelerates the coming recession. So party on you crazy bulls, but keep an eye on the shore line, it’s approaching much faster than you think, and it’s going to hurt when we finally crash in to it. But it beats going down with the ship.

TLDR: just read it lol. Terrible summary = Stocks go up for now, but bad crash type things are coming.

BXMT is now back above 20 .. higher than it was before the dividend cut 2 months ago. That is when many sold, and shorted, the stock. Carson Block (well known short-seller) recommended shorting as he predicted a 50% dividend cut.

Consider this .. a company does not create (or subtract) value by altering its dividend. BXMT decided to retain more of its investors’ capital than before. It used some of this capital to buy back its own stick, well below book value. Book value matters less for say a tech company, but for a “bank” (which is a way to think about BXMT ..it is a lender, not an owner of real estate), book value is a good indication of “true value” unless one believes the book value is not reflecting economic reality. I believe BXMT management has done a good job reflecting economic reality in their book value. So, rather than a short candidate, BXMT was a great buy.

OMG GOD GUYS ELONS SO CRINGE, he just tweeted I hate him. Teslas STRICTLY A CAR COMPANY and rivian will destroy them.

Decided to yolo my remaining capital in QQQ calls yesterday(Cost: 2.39), sold when market opened today.

All time still down 6.5k, at least one big step closer to breakeven I guess.

Amid global economic shifts and currency fluctuations, Coupang (NYSE: CPNG) stands out as an appealing US-listed stock. As South Korea’s leading e-commerce platform, Coupang generates its revenue in Korean won, offering a natural hedge against potential depreciation of the US dollar. Furthermore, the company’s deep integration with the artificial intelligence (AI) sector enhances its operational efficiency and customer experience. Investing in Coupang provides exposure to a robust foreign market and the rapidly expanding AI industry, making it an attractive option for investors seeking both growth and currency diversification.

Almost close to 1 M

For all those who always reference …. “But in September 2007 there was a 50bps rate cut and a horrible recession after…”. Go back further.

https://www.abc27.com/business/press-releases/accesswire/917511/shareholder-alert-pomerantz-law-firm-announces-the-filing-of-a-class-action-against-super-micro-computer-inc-smci/

Im not a geh ber usually but this shit has to go down.

10k delayed and 12b-25 extension granted for 15 days which also expired last monday and still no news. i dont understand how this is kept so quiet. sounds like wirecard 2.0 to me.

Pomerantz Law Firm filing class action is no joke either.

I cant wrap my head around how this shithole is up 4% pre market. im getting puts now.

TLDR: SMCI got accused by hindenburg for shady business then missed their annual reporting deadline on 08/30 and filed for extension. Extension ended 09/16 and still no report. Class action suits filed. Stock was down on news in August but went up since then.. so puts.

Why didn’t anyone tell me to hold. At market open today this would make.. atleast.. atleast like A LOT of money 😔

My trading pre-market today 🤞

And if you do. What is your price target and how soon it takes to reach?

I'll start

Redfin - $44 - by end of 2025

Reason: interest rate tailwind with current short interest of 16.93%

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Here is my second attempt at posting. Rumble stock ownership breakdown: (1) Insiders 62% (2) Dan Bongino 10% (3) Institutions 23%. That comes out to 95% ownership 1,2 and 3. How is it possible that 14 million shares are currently held short and listed as 16% of the float? The math here isn't adding up. Until I realized that the outstanding shares used to calculate float also includes warrants (i.e. call options) that were issued when Rumble went SPAC/IPO that have strike prices of $10 and $17. Given that the stock is currently trading at $5.27, it makes no sense that the warrants should also be calculated in the float size. Anyways, it is clear that there is some funny business (naked shorting a definite) going on here.

As for the business, Rumble web traffic is up nearly 40% year over year and the share price hasn't reflected this bump at all. Also, this is only year 1 that Rumble started monetizing its platform with ads (started in 2024) and also launched a cloud service (started in April). In year 1, they are already on pace to have $100 million in revenue. That's pretty insane for any business. 

For comparison, Redditt has a market cap of $10 billion with a similar small (compared to other platforms like Meta, etc) but very devoted user base like Rumble. I don't see why Rumble couldn't 2-3x its market cap with such a high growth rate and monetization has only just started. For instance, their cloud business has already landed two big names in Hard Rock Hotel and Miami Dolphins only a few months after launching the service.

Thoughts: Given the strange math in the share ownership (likely heavily naked short) and rapidly growing business. I think this is a great risk to reward play. Not to mention that IF Trump were to win, the stock could easily double in a few days. The stock price moves almost in tandem with the election odds for Trump. I'm not going to make a guess at who wins, but it's a 50/50 at this point and the short term upside is huge. 

Japan's inflation is accelerating, and both CPI and Core CPI continue to rise, we might see another kamikaze attack from Jappo on tomorrow, it's time to take some cover!

https://www.reuters.com/markets/rates-bonds/japan-august-inflation-seen-accelerating-boosting-case-boj-rate-hike-2024-09-13/

TOKYO, Sept 13 (Reuters) - Japan's consumer inflation rate likely picked up for the fourth straight month in August, a Reuters poll of 20 economists showed, tracking comfortably above the central bank's 2% target and keeping alive expectations for more rate hikes ahead.

The core Consumer Prices Index (CPI), which excludes fresh food but includes energy items, likely rose 2.8% year-on-year in August, ticking up from a 2.7% rise in the previous month.

https://preview.redd.it/3vc7bcfa0ppd1.png?width=872&format=png&auto=webp&s=d254584bc5a14d061c9eaf8db2474294a688c5c6

NuScale Power Corp ($SMR) is supposed to be the one building the modular reactors. And suddenly analysts are upping their target prices for $SMR from ~$9 today to $12-15 and adding "buy" recommendations.

https://dailysiliconvalley.com/article/microsoft-blackrock-and-uae-to-invest-30-billion-in-ai-development-powering-the-future-with-nuclear-innovation/

EDIT: Adding a new analyst update. I think this might actually be doing something now:

https://www.marketbeat.com/instant-alerts/nyse-smr-percent-advance-2024-09-18/

EDIT 2: Institutional investment in SMR announced:

https://www.marketbeat.com/instant-alerts/nyse-smr-sec-filing-2024-09-19/

i bought nio at $40 over leveraged and got margined called this happened in 2022 finally got the balls to show this i was 18 at the time good lesson

In June of this year, I began building positions in Chinese equities, focusing particularly on undervalued stocks such as Alibaba, AIG, and Geely Auto. I also invested in BYD Auto, primarily driven by thematic considerations.

The recent 50 basis point rate cut by the Fed signals the start of an aggressive easing cycle. This move may help mitigate further depreciation of the RMB and pave the way for stronger monetary and fiscal stimulus in China. The real rates in China have remained particularly high for an economy showing deflationary tendencies. This might be an interesting juncture for Chinese monetary policy to loosen.

I believe the risk-reward profile for Chinese value equities is favorable, especially in the short term, and we could see a strong rally ahead of the US elections. A potential win for Harris could further enhance market sentiment.

The market was pricing in a rate cut schedule that was more aggressive than what the fed announced. The fed is cutting rates as a return to normalcy, not as if we were teetering on recession/downturn. When Powell spoke there are 2 key moments to focus on.

1. He was asked if they had known the July jobs data if they would have cut rates and he said “probably.”

2. He said he was less confident in the jobs numbers as they kept getting revised down.

Neither of these would be a problem on their own but he also said he believed the fed was not behind the curve on addressing labor market (contradicting number 1.) And he said the Fed was purely data driven in their response, which begs the question of whether or not they have accurate and up to date data. Hence the sell off.

Since my last DD on Delta Airlines (DAL) 2 weeks ago, DAL has run up by 12%, trading from 42 to 47. During this time, several readers pointed out valid concerns regarding the investment. I am updating my DD after two weeks to reflect developments regarding DAL as well as to address some of the outstanding concerns.  

In this post, I will touch on the following 

• Current news, analyst upgrades, and mid-quarter guidance from Delta 
• Address potential concerns about DAL 
• Further explore Delta’s competitive advantage and market position strength 
• Re-affirm my original price target of 56, representing another 20% upside by EOY 2024, despite the increasing valuation 

Current News and Updated Guidance 

• While the Fed rate cuts are at the forefront of investors' minds, fuel and oil prices are on the decline, both trends that benefit DAL 
• DAL outlines macro tailwinds in their recent mid-quarter guidance 
  • Investor Update (q4cdn.com) 
  • Fuel cost tailwinds as predicted from my DD 2 weeks ago 
  • No CRWD hangover on bookings 
• Analyst Rating Updates 
  • 7/12 Bernstein maintains outperform on DAL 
  • 7/13 BOA assigns BUY on DAL 
  • 7/17 TD Cowen maintains buy on DAL 
  • 7/17 Evercore gives buy rating on DAL 

Addressing the main concerns outlined by critics of my previous DD: 

Main concerns: 

• Airlines industry is too competitive, pressuring margins and limiting return to investors 
• Airlines are capital intensive, using high leverage to sustain their expensive aircraft fleets 
• There has been no fundamental change to Delta’s value proposition and market position 
• Technical Analysis on the long term is unreliable 

Response to concerns: 

Airline industry competition and margins – while the industry has been historically competitive, several key trends are strengthening the industry as a whole: 

• Oil and fuel prices declining, increasing margins 
• Rational supply control and elimination of excess routes by airlines inorganically raising demand 
• Rate cuts and consumer confidence leading to increasing demand from both corporate and leisure 

Capital intensive and high debt – while DAL took on high debt, it is actively making debt repayments and becoming investment grade top priorities 

• DAL’s debt is 94% fixed rate, reducing volatility associated with interest rates 
• DAL already has lower debt ratios than most of its peers 
• Fed rate cut opens the door for potentially favorable interest rate negotiations on debt 

No fundamental change in value proposition – DAL has consistently been an industry leader in terms of operations and reliability 

• Recent surveys and DAL demand demonstrates negligible brand impact from CRWD outage 
• Weakness in LUV and AAL (AAL dropping from S&P 500) further strengthens DAL as the major player in the industry 
• DAL’s leading ROE, ROA, and ROIC (13%) in the industry make it the most reliable choice for gaining exposure to air travel demand 

Technical analysis in the long term is unreliable – while I am not a professional on technical analysis, it certainly helps the thesis 

• Long-term positive technical trends help support the argument that DAL and airline industry is trending up 
• Short term MA outpacing long term 200MA indicates short-term momentum 

Why DAL maintains stronger ROIC, ROA, ROE, and operating margins than its peers 

• Main thesis – competitive advantage driven by its newer fleet compared to peers 
  • Newer fleet drives its strong brand strength, strong operational reliability, strong operating margins 
• Why newer fleet is a MOAT and hard to imitate 
  • New aircraft supply constraints 
  • High switching costs, debt costs for new aircraft 
• How new fleet drives brand 
  • Brand strength built on operational reliability, experience 
  • Newer planes are easier to maintain, less unexpected issues 
  • Better customer experience on newer planes compared to peers 
• How new fleet drives superior margins 
  • Newer planes are more fuel efficient, lower fuel consumption and costs 
  • Newer planes are less expensive to maintain 
  • Stronger brand, reliability, and experience allows DAL to charge a premium 

Outlook and Current Positions 

• I am maintaining my bullish outlook and my price target of 56 by EOY 2024, though now I am even more confident in my forecast 
• My current DAL positions (total market value of 24.8k) 
  • 50 Dec24 $50 Calls 
  • 30 Jan25 $50 Calls 
  • 40 Jan25 $55 Calls 

The exact same scenario happened in 2007.

We started off with a 50 cut from 5.25% in Sept. '07 and went all the way to 3.50% by January '08. This was due to how fast unemployement was rising. But the FEDs target right now is 3.50% end of 2025.

GDP was the exact same growth rate as today and unemployment was the exact same as well. The only thing we can watch for is if unemployment rises as fast as it did in '07. Mortgage applications are increasing with a ton of people on the sideline ready to purchase homes.

The current layoffs are from companies over-hiring from COVID so they can get back to pre pandemic levels.

IDK thoughts?